Week Ahead Economic Preview: Week of 4 August 2025

The following is an extract from S&P Global Market Intelligence’s latest Week Ahead Economic Preview. For the full report, please click on the ‘Download Full Report’ link.

Service sector PMIs, trade data and the Bank of England in focus

Service sector PMI surveys will provide an assessment of global economic trends in the face of ongoing tariff-related uncertainty, as will trade data from the US and mainland China. The Bank of England meanwhile meets to set interest rates amid mixed policy signals from recent economic data.

After manufacturing PMI surveys showed worldwide factory conditions deteriorating in July, linked in part to the fading boost from tariff front-loading, attention turns to the services economies in the coming week.

Being typically more domestically focused than manufacturing, as well as usually accounting for a far greater share of GDP, services PMIs are key determinants of monetary policy settings. Earlier flash PMI data for major developed economies showed some encouraging signals in terms of economic resilience in these tertiary sectors, helping offset some of the weaker trends evident in manufacturing. Most pronounced was a rise in US services output, in part linked to improving financial conditions: as stock markets rise, businesses and households often feel more confident. This should bode well for the ISM non-manufacturing/services survey.

After stronger than expected GDP growth in the second quarter, the market will be viewing any robust July services PMI and ISM readings as further diminishing FOMC rate cut hopes after US policymakers chose once again to hold rates steady at their July meeting.

The market is, however, looking for the Bank of England to trim its policy rate by a further 25 basis points at its meeting on Thursday. That would be a fifth cut to take the Bank rate to 4.0%, its lowest since early 2023. However, the decision may not be unanimous. Despite economic growth remaining lacklustre in recent months, and steep job losses persisting into July according to the flash PMI, inflation has risen to 3.7%, well above the Bank of England’s 2.0% target. Hawkish members of the Monetary Policy Committee will want to see that the recent uplift in inflation, linked in part to recent government policy changes which have increased wage costs, will prove transitory and not lead to persistent above-target inflation.

In APAC, the key data releases, besides the PMIs, are trade and inflation data from mainland China, as analysts wait to assess the impact of tariff-related pressures on manufacturing against domestic stimulus.

Worldwide service sector PMI numbers will help assess broader global economic resilience after manufacturing business conditions deteriorated in July.

Policymakers at the Bank of England will need to decide if sluggish growth warrants another rate cut despite signs of persistent inflation